‘Coward’ Government Denounced Over ArmenTel Tariff Rise

The Armenian authorities’ continuing silence on the ArmenTel operator’s decision to drastically raise telephone charges came under fierce attack on Tuesday from the country’s leading opposition parties and some civic groups.

Representatives of over a dozen parties gathered in Yerevan to condemn the government’s failure to prevent the Greek-owned monopoly from introducing payment for every minute of domestic phone calls which will mean bigger bills for most phone and Internet users.

Deputy Arshak Sadoyan, right, making his case against ArmenTel

The government has been strongly opposed to the measure and has repeatedly warned ArmenTel against taking “unilateral” steps. Minister of Transport and Telecommunications Andranik Manukian warned last week that the fee rise will be illegal without his approval. However, neither he nor any other senior official has spoken out publicly since the new payment scheme took effect on Saturday.

The government stance was described as a “sign of cowardice” by Arshak Sadoyan, a prominent opposition legislator and a vocal critic of ArmenTel. Speaking at Tuesday’s meeting, Sadoyan called for a “mass struggle in all directions” against ArmenTel. A representative of the People’s Party of Armenia (HZhK) said it is ready to back any legislative initiative in the parliament aimed at restricting the company’s pricing power.

Under the terms of its 1998 purchase of ArmenTel, the state-controlled Hellenic Telecommunications Organization (OTE) is free to set tariffs for its services. This fact leads many opposition politicians to put the blame for the unpopular measure on President Robert Kocharian who presided over the $200 million. “The president of the republic is the one who signed that deal and he himself must deal with the problem,” said Napoleon Azizian, a deputy from the opposition Right and Accord bloc.

OTE argues that the per-minute payment is need for boosting the falling earnings of its Armenian subsidiary. ArmenTel profits fell by 31.7 percent to just over $3 million in the first half of the year despite a 25 percent surge in its operating revenues which stood at around $31 million. But critics counter that of all OTE divisions ArmenTel registered the highest profit margin of 9.6 percent.

According to the head of the ad hoc commission of the Armenian parliament investigating alleged abuses in the telecom sector, Vazgen Manukian, many people will be forced to abandon phone services in the face of the substantially higher tariffs. Local Internet providers are also ringing alarm bells, fearing that the per-minute system could sharply reduce the already small number of Internet users.

Beginning this month Armenians will be charged 4.8 drams (about one US cent) for every minute of local phone conversations exceeding a two-hour limit covered by a fixed monthly fee of 900 drams. The tariff will be gradually increased to eight drams.

Meeting with representatives of several women’s organizations campaigning against the price hike, Manukian said the authorities are paying a heavy price for their controversial decision to grant the Greeks 15-year exclusive rights on all forms of telecommunication in Armenia. “There is no [sell-off] price that warrants a monopoly. Monopoly is an evil in itself,” he said.

He also said the government should consider making corresponding changes in ArmenTel’s operating license to revoke the exclusive rights. The OTE management has said before that it would give up the monopoly only after getting a hefty compensation.